TENANTS could be allowed to transfer rental deposits between landlords when they move.
The change could mean renters not having to pay a large deposit for their next property while waiting for a refund on the last.
Renters could have one less thing to worry about when moving if new deposit rules come into force[/caption]
Government ministers are considering the scheme with James Brokenshire, the housing secretary, putting the proposal forward today at the Chartered Institute of Housing conference in Manchester.
The scheme is known as deposit “passporting” and aims to ease the pressure on millions of renters who typically need one or two months’ rent to fund a deposit while having cash tied up with an existing landlord.
The average rental deposit is £1,040 in England and Wales, while London tenants face parting with £1,750 when moving property.
But under new rules, passporting would allow a direct transfer of funds from the previous landlord to the new one on the day of the move.
Is my deposit protected?
IF your deposit is protected it will be with one of these services, so always check with them to see which you need to speak to if you are having a disagreement with your landlord.
For England and Wales:
- Deposit Protection Service
- MyDeposits – including deposits that were held by Capita
- Tenancy Deposit Scheme
- Letting Protection Service Scotland
- Safe Deposits Scotland
For Northern Ireland:
- Tenancy Deposit Scheme Northern Ireland
- My Deposits Northern Ireland
- Letting Protection Service NI
The previous landlord would still be protected and able to claim part of the deposit for any damages.
Similarly, the tenant could top up the deposit if necessary.
The new scheme could be a lifeline to the UK’s 4.5million private renters faced with hefty deposit requirements.
We recently reported that renters still face forking out up to £2,500 for upfront deposits even after the tenant fee ban took force on June 1.
However, the government has no timescale on when the scheme will be up and running so renters might be waiting a while for it to take force.
The government wants to do some research first to work out if this will be a government-run scheme or one headed-up by deposit schemes.
Property expert Henry Pryor describes the passporting scheme as “one small step in the right direction”.
Mr Pryor said: “This is not something that will make finding a home to rent easier or more affordable for most tenants.
“Whilst a problem for a few people, most tenants can retrieve their previous deposit and use it as a deposit for their next home. It’s not rocket science.”
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Renters can get £192 back from landlords as a fee ban caps deposits at five weeks.
There’s a calculator to helper renters avoid being ripped off after the ban on tenant fees.
Plus, we tell you what you can do if your landlord or letting agent won’t return your security deposit.
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